The Short Sale - It's funny, this term and process of selling property has been around for years, but not until the last few has it really become "household" lingo. I'm asked almost daily about how to go about the process by folks that are facing foreclosure.
So, for those interested, the process of a "short sale" basically goes like this: You list your home for sale. You eventually get an offer which is presented to the bank(s) which holds the current mortgage(s). Id the bank is willing to accept a lower amount than what is owed, this is considered selling "short" of the payoff, hence a Short Sale. In other words, they are being paid "short" of what is owed by you in order to transfer ownership to the buyer before the foreclosure process begins. 2nd liens (mortgages) can be a bit more tricky, especially if have 2 different banks (mortgages) involved.
banks in this country have faced an extremely high rate of foreclosures the last 24 months. They are not necessarily in the business of keeping real estate inventory unless someone is paying the mortgage on the property. Depending on the situation, most would rather take a little less than you owe than increasing their via foreclosures.
Now every bank is different, so the process may vary slightly. Each has their own set of paperwork or Addendum's. From what I've experienced, banks can take from a few days up to 4-6 before they respond to an offer. Most want Earnest Money. Most will pay some type of closing costs. Most won't make ANY repairs. None of them have an emotional attachment to the property. Needless to say, buyers who are making an offer on property subject to "short sale" need to be patient. Furthermore, make sure your Realtor is familiar with the situation and process so there's no surprises later.
For those who want more information about the "short sale" process, I'm here to help. Thanks and good luck!